Consumer Rights

The subject of consumer rights historically covers two related areas: issues related to the actual products and services that a company sells to consumers and corporate business practices that directly affect consumers. As part of the evolution of consumer rights and concerns, a third area, spawned in large part by the growth in information processing industries and integrated computing networks, has emerged. This area concerns the use of information about the consumer, including privacy and security of that information. While there is little legislation establishing actual rights of consumers, there is a large body of law dealing with a range of consumer issues, which taken together are often referred to as “consumer protection.”

At its core, a discussion of consumer rights implies that the interactions between consumers and corporations will naturally tend to be to the advantage of the corporation (due not only to size but also due to political, economic, and social influence) and so legal and political means should be used to equalize any imbalance of power. (More bluntly, many laws passed to protect consumers assume that the consumer is either [Page 435]unable or incapable of protecting himself or herself, due to the complex nature of business or products, and must be protected in the most basic sense of the word.) The key assumption of most consumer rights initiatives is that, absent any restraining influences, corporations will make decisions that ignore the welfare of consumers and maximize the assumed advantages of the supplier. A secondary assumption is that the consumer will (1) usually have less information than a business and (2) will be more easily confused by business complexities and, therefore, must be protected from businesses that will take advantage of these informational or experiential asymmetries. (Note that the advent of the Internet has greatly reduced the information disparity between consumers and suppliers, as well as offering a significant increase in resources that consumers can use to defend their rights. Consumer rights advocates believe information is power and that information transparency is critical to producing informed consumers.)

Most of the societal and legislative initiatives over the years either prohibit what is considered to be anticonsumer behavior or provide tools to consumers by which they may force companies to address individual (or sometimes group) grievances related to products or business practices. Anticonsumer behavior has historically included clear-cut examples such as price-fixing and price-gouging, deceptive marketing and sales practices, production and distribution of dangerous products (including pharmaceuticals and medical devices), and failure to deliver promised products or services. Less obvious but no less critical to the consumer are more recent developments in the consumer-business relationship, such as information privacy (especially in health care matters), unsolicited sales and marketing, and refusal to provide services or nondiscriminatory prices to a particular class of consumer.

While there is a case to be made that the Hippocratic Oath (the traditional oath that physicians take that binds them to keep the best interests of the patient uppermost in their considerations) embodied the first consumer protection principles in history, arguably the first U.S. legislation intended to protect the consumer was the Sherman Antitrust Act, signed by President Benjamin Harrison in 1890. The act declared that “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.” Often assumed to restrict monopolies, the act was targeted not at the size or form of corporations or trusts but at “restraint of trade,” which would ultimately lead to artificially high prices for the consumer. Free markets were deemed better for the consumer; anything that prevented free markets was, therefore, bad and should be outlawed.

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